Oncogenic mutations in sequence specific transcription factors that are vital for correct tissue and cell-type specific regulation of gene expression during embryonic development and homeostasis lead to aberrant transcriptomes that contribute to malignant phenotypes. We have previously identified a universal corepressor protein, KAP-1, for the KRAB-zinc finger protein superfamily of sequence specific transcriptional repressors. Mechanistically, the tandem arrangement of a highly conserved PHD finger and bromodomain at the C-terminus of KAP-1 functions as a cooperative repression unit that interacts with the NuRD histone deacetylase complex, implicating a role for histone deacetylase activity in KRAB:KAP-1 repression. A direct interaction between KAP-1 and nanomolar amounts of the HP1 family of non - histone chromosomal proteins implies a role for KRAB-ZFPs in heterochromatin mediated gene silencing. In preliminary data to support this proposal, we have identified an interaction between KAP-1 and a novel protein containing a SET domain, KIS1 (KAP-1 Interacting SET protein-1). The SET domain is a signature motif that possesses intrinsic histone methyl- transferase activity. Furthermore, NH2-terminal histone tails covalently modified with methyl groups are recognized with high affinity by the HP1 protein family. We postulate that recruitment of KIS1 by KAP-1 to KRAB-ZFP target genes modifies histones that facilitate the recruitment of HP1 proteins to mediate stable transcriptional gene silencing in localized heterochromatic environments. The objective of this application is to comprehensively characterize the biochemical and cellular functions of KIS1, and histone methylation in heterochromatin mediated silencing by the KRAB:KAP-1 repression system. Specifically we will: 1) provide a high resolution definition of the KAP-1:KIS1 interaction, 2) biochemically identify endogenous KIS1-associated polypeptides required for function in vivo, and 3) define molecular characteristics of a single copy endogenous gene or transgene repressed by the KRAB:KAP-1 repression system. It is our expectation that the proposed research will define KIS1 as the missing link to understanding heterochromatin mediated gene silencing by the KRAB:KAP-1 repression system.